SFC Brokers

The financial markets and overall investment industry in Hong Kong is huge. In fact, it’s one of the largest financial markets in the world with strong ties to the international markets. Therefore, as Hong Kong’s financial trading industry is so big and internationally recognized, they must maintain strict and competent regulation. The regulatory authority in charge of maintaining the integrity of financial markets and enforcing regulations on financial businesses is the Hong Kong Securities and Futures Commission (SFC).

Introduction to SFC Regulation

The Hong Kong Securities and Futures Commission is an independent regulatory agency, tasked with the implementation of regulation and supervision of financial entities operating in the Hong Kong capital markets. The SFC was established in 1989 by government authorities in the Hong Kong legislature. This regulatory agency was introduced to provide investors with a secure, fair, and transparent trading environment.In order to do this, the SFC has been given the power to regulate the financial markets to protect its participants including investors, consumers, brokerages and financial services. By regulating these markets, the Hong Kong economy is able to grow while maintaining stability and attracting further investment.

SFC Responsibilities

The SFC is the most important financial markets regulator in Hong Kong and therefore have numerous responsibilities. Their main responsibility is to competently regulate the financial markets operating in Hong Kong while encouraging growth and competitiveness in the industry. As well, they are responsible for informing and educating investors on the best practices for participating in these markets. They are responsible for providing a fair, safe and transparent investment environment. As well, they must license and regulate the financial companies who meet their strict regulatory requirements.

How SFC Regulation protects you

The SFC regulation protects investors, consumers, and businesses involved in the Hong Kong financial markets. It does this by creating and implementing rules and regulations for financial businesses and services to follow. These rules and regulations were created solely for the protection of consumers and the integrity of the financial markets. Through these regulations, the markets are transparent and fair, which provides investors with a safe and secure trading environment. Another way the SFC protects investors is by listing brokerages who are compliant with their regulations as well as listing brokerages who are fraudulent.

Guidelines for SFC Regulated Brokers

Not just any broker can become regulated by the SFC. They must be competent brokerages who follow the guidelines laid out by the SFC. Such guidelines include:
• The compliance of licencing procedures and renewal of licences.
• Periodic reporting of finances and services to the SFC.
• Must have annual audits conducted by a trusted third party.
• Must hold clients’ funds in secure and segregated bank accounts.
• Must meet the minimum capital requirements and level of liquidity to sufficiently offer investment services.